How to Manage Change During a Merger or Acquisition

Any type of change is traumatic, but few things are scarier than a merger or acquisition. Whether you’re doing the acquiring or you’re being acquired, this process can be stressful for everyone involved.

Managing change related to a merger or acquisition is necessary for both the short- and long-term health of your organization. While mismanagement can lead to lost productivity in the short team, it can also weaken your company from within and make it vulnerable in the future.

To effectively manage change, you should focus on your most valuable resource: your employees. Here are five tips to help you prepare for the major change of a merger or acquisition:

1. Identify Skill Gaps and Overlaps

When you join forces with another organization, the first thing on employees’ minds is the status of their jobs. To avoid this panic, you should address employee concerns long before change occurs.

And long before you communicate with employees, you should spend time defining how your organization will look post-merger. This will provide visibility into skill gaps and overlaps. If you clarify the situation as quickly as possible, you’ll find it easier to manage change. Less concerned about their jobs or their future, employees will slowly turn back to the task at hand.

2. Focus on Organizational Culture

Bringing together two different organizations is going to combine two different types of organizational cultures. This could cause problems, but it doesn’t have to. In fact, culture can be one of your most effective tools in managing change – it can autocorrect for things you simply cannot control.

To avoid culture clashes, you should meet with teams throughout the organization to decide how processes will look post-merger. A strong business process reengineering methodology can help you establish a process framework prior to merging with another organization.

Focusing on culture before a merger or acquisition will make it easier for you to incorporate new employees into your organization and facilitate your transformation.

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3. Make Communication Easy

During times of change, rumors are your worst enemy. The last thing you want is employees gossiping about what they think is going to happen post-merger. This not only takes people away from work, but it hurts workplace morale, which can have a negative impact on the health of the company.

It’s important to establish clear and open lines of communication with employees throughout the acquisition process. Consider developing an organizational change management plan and holding weekly meetings to discuss the latest news related to the merger and to answer any questions people may have. This simple step ensures everyone is on the same page and gives you the chance to dispel rumors while keeping everyone calm and working towards a common goal.

4. Establish Purpose

Many organizations use mergers and acquisitions as a growth strategy. The idea is that if you can combine highly-profitable companies in similar but different markets, then you can increase efficiency and profitability. This can be a smart strategy, but only if stakeholders are aligned.

To ensure alignment, you should communicate your strategy and explain how it aligns with your organizational vision. If acquiring a certain company gives you access to a new market, then make your intentions clear.

5. Collaborate

Organizational change can often feel as though it’s being imposed from the top, and this can lead to change resistance. It’s important to make the transformation as collaborative as you can.

Recruiting integration teams is a great way to spread the workload of change management, and it makes people feel more involved in the process. Participating in integration teams gives employees another way to stay informed about organizational changes.

While preparing for change is important, unforeseen challenges always arise. You should develop a plan but remain flexible as you navigate change. Keep these tips in mind, as they will make your merger or acquisition more successful.

About the Author: Jock Purtle is the Founder and CEO of a digital business brokerage. Prior to starting DigitalExits, he was an eCommerce entrepreneur. In his current role, he works with business owners to help them strategize growth and plan an exit, which has given him considerable experience in fields such as organizational change and corporate culture.

Note: The inclusion of guest posts on the Panorama website does not imply endorsement of any specific product or service. Panorama is, and always will remain, completely independent and vendor-neutral. If you are interested in guest blogging opportunities, click to read more about our submission guidelines.

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